Nothing wrong with being dumb

Tony Poulos
15 Dec 2011

I've decided there's nothing wrong with being dumb. These days just having a smartphone handy can make the dumbest person absolutely brilliant, as long as he's smart enough to use the smartphone. However, when it comes to being a network operator, the word "dumb", when used with that other hackneyed noun, "pipe", sends shivers down telco CEO spines.

Well, not quite all. There is one wholesale satellite and terrestrial LTE provider in the US that relishes being not just a dumb pipe, but strives to build the dumbest of all wireless pipes possible -- the ultimate dumb pipe! In fact, that's the mantra of LightSquared CEO Sanjiv Ahuja, who said, "We want to be the dumbest wireless broadband pipe. No intelligence in our network. None. Zero."

So, how come LightSquared is flying in the face of the industry's accepted norm that strives for intelligence to provide value-added services deemed critical for survival? Maybe it's because most existing, and dare I say "legacy" networks, have been built that way in order to address the lucrative consumer, corporate and enterprise markets. In fact, most networks strive to be one-stop shops from everything, quite often failing to maximize returns from any one sector.

With diminishing high-yield voice revenues giving way to low-yield data, the cost of being all things to all people is starting to come into question and savvy CEOs are not just looking at cost-reduction as their savior but also at dramatic business model re-engineering. Discovering the true cost of servicing retail customers may be an impossible task, but if you imagine not having to worry about any operational and business systems, service delivery platforms, application servers, etc., then you start to get a gauge on what LightSquared is trying to achieve.

That's not say that operating the ultimate dumb pipe is free of all these overheads. Even as a pure wholesale operation, it still has to provision services and bill its customers, but even those systems are kept to a basic minimum and are outsourced. Having an all-IP LTE network (that's even hosted by someone else), having a large chunk of spectrum to play with and being able to use both terrestrial and satellite networks by utilizing a clever Qualcomm chipset in devices, means that LightSquared can just worry about finding wholesale customers that require a minimum of attention, just access to a, dare I say it, "big fat pipe".

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